Summary

• Prices have stabilized at low levels with early signs of price increases on larger goods.
• Rough diamond production cutbacks now flowing through pipeline as shortages create increased manufacturing demand.
• Recent JCK Las Vegas trade show indicates tough trading environment.

Trading Notes

Prices seem to have stabilized over the last few weeks with slight price increases on larger better quality goods. Severe cut backs to rough production over last few months have now flowed through the pipeline which has coincided with more positive economic news and jewellers starting to re-stock inventory levels. Recent industry trade show confirmed tough trading environment with buyers holding bargaining power on price. 1-3ct investment diamond prices have stabilized at low levels presenting good buying opportunities, larger investment diamond (+3ct) prices have commenced upswing. We see increased liquidity in Very Good makes as buyers now showing price resistance to high premiums on Excellent and Ideal makes.

Market News

7.03 carat vivid blue IF diamond sold for a record breaking $9.48 million at a recent Sotheby’s auction in Geneva. The sale broke two auction records — the world record price per carat for any gemstone at auction, and world record price for a fancy vivid blue diamond at auction. De Beers launches its Forever Diamond Grading Report to compliment its Forevermark diamonds. Rio Tinto joins other major diamond miners in executing considerable (20%) cutback in production. Diamond and jewellery exchange to be set-up in Armenia. The DTC May site estimated at $250m up 25 percent on previous sight but still 60 percent down on corresponding site in 2008. Antwerp Diamond Bourse launches new website – www.diamondbourseantwerp.com.

Comparative Indices and Annual Returns

Comparitive Graphs and Indices - June 2009